NYC-based Stray Boots is out to prove that there’s more than one way to get around in a city with its mobile-guided urban tours, and the startup announced today that it has closed a $2 million Series A funding round led by Milestone Venture Partners, with participation from Correlation Ventures and other investors. The company also recently announced the launch of its first iPhone app, and also took part in the Entrepreneurs Roundtable (ER) Accelerator program earlier this year. It will look to use the funding to focus on product development and expanding its footprint of current urban tour offerings in over 16 cities in the U.S. and UK, looking to double that number by the end of 2013.

Co-founded by Avi Millman, Scott Knackmuhs, and Noemi Millman, the trio initially set out to create something that would turn exploring a city into something more than traditional sightseeing and tours, and make the experience more akin to a game. Since launching Stray Boots, 60,000 customers have logged more than 128,000 game play hours and completed more than 800,000 scavenger-hunt like challenges.

“I had been traveling with my family in Rome the year before, and realized as I was visiting all the different sites around the city and I sort of felt I was on a scavenger hunt,” said Millman in an interview. “It really got me thinking about how passive guided experiences are for exploring the world…it’s one directional, you’re just taking in information. And I was just thinking how much more engaging and fun that experience could be.”

Having been an avid gamer all his life, Millman decided that gamifying the guided tour experience could prove to be a huge opportunity. The team initially started with an SMS approach where users would sign up for a tour online, get a code, text it to Stray Boots to start the adventure. It would give customers a starting point, and then provide challenges requiring them to visit a given place to find clues to answer the challenge before successfully moving on. Although hesitant at first to go into the mobile app space out of a fear of complicating the experience, the startup decided to enter the ERA program where it got the mentorship and resources required to build out its iPhone app, currently exclusively for tours in New York, with one central app catering to all supported cities to follow shortly.

Each tour costs $12, which Millman justifies because it’s roughly the same price as a movie, and he said each tour should take 2-3 hours to complete. With the addition of the iPhone app, the tours will be presented as in-app purchases. Although the company has also created custom corporate tours for enterprises like LinkedIn, American Express, and Accenture, the startup will be looking to move away from the custom tour approach, despite it providing another revenue stream, due in large part to the inability to scale that aspect of the model in a significant way.

With innovations in travel discovery like Desti, a Siri-like iPad app that helps people plan their trips and discover new places, Trover, a crowdsourced photo-driven approach to traveling, and Triposo, a which provides offline discovery maps, Stray Boots’ approach to travel will strike a chord for those looking for a completely new way to engage with their surroundings. Although the tours are quite popular among tourists, Millman noted that its tours are also used by locals, with couples using them for date ideas, parents looking to motivate their kids to be more active, and friends gifting them for birthdays.

The company will be looking to add to its existing roster of cities with Austin, TX up next, and a strong focus on the domestic market in the U.S where it plans to double its footprint over the course of the next year. It is also seeing strong demand from Canadians who use the service while visiting the U.S., and will be looking to expand north of the border as well. With the new funding, the company will have to remain on its toes as mobile and tablet solutions continue to revolutionize travel discovery and planning.

Humayun Khan is a Senior Writer and Analyst at BetaKit. A marketing graduate with honors, Humayun's work experience spans the fields of consumer behaviour with noted contributions in an academic paper published in the Journal of Consumer Psychology and market research consulting having coordinated projects for a major financial services client at Decode Inc. More recently he was involved in business strategy as a Business Analyst for an equipment rental outlet and prior in the National Marketing Department at Ernst & Young LLP. He is passionate about emerging and disrupting technology and its ability to transform and create entirely new industries.